The Middle East FOB price of urea was quoted at $506.25/tonne on Thursday
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PTI
The price of urea in the global market is reported to have spiked in the Middle East from India’s last contracted rate of $530/tonne (CFR). This has been attributed to the sudden demand from India amid declining stocks. On the other hand, Indian importers are hopeful of bringing down prices to about $500/tonne when the bids open on September 2.
The Middle East FOB price of urea was quoted at $506.25/tonne on Thursday, and about $30/tonne may be added as freight and insurance cost (CFR) to bring the crop nutrient to India, experts said. Urea is not globally traded on any platform, and rates are many a times decided between buyers and sellers (or their representatives), based on mutual negotiations.
“Already Indonesia and Malaysia are reported to have convinced China to lower the urea rate, and India may also get a quote close to around $500/tonne (CFR) in the next round. If that happens, producers in the Middle East will likely lower their rates,” an industry source said.
15% up y-o-y
Government data compiled by the Fertilizer Ministry show that the average urea (FOB) rate in June was $395/tonne, which is 15 per cent higher than the year-ago period. After the government decided to increase urea imports, amid long queues of farmers and black marketing, international prices have moved up.
“Instead of entering the global market at once with such a large quantity, the import should have been well planned with month-wise delivery target as the government knows the demand, sales and production capacity,” an industry expert said.
In 2024-25, India’s domestic production of urea was 30.7 million tonnes (mt) and import was 5.6 mt. Only due to a good carry forward stock from previous year, the government was able to manage the 38.79 mt of consumption.
But, instead of spreading the import quantity throughout the current fiscal, the government has decided to buy 2 mt in the first week of August and will likely approve another 2 mt by September 4. The government-owned National Fertilizers (NFL) floated an import tender on August 15 to take delivery of 1 mt of urea, each on ports in east and west coast.
Buoyed by crop shift
The closing stock of urea on August 14 was 2.96 mt, which is over 61 per cent lower than 7.59 mt a year ago. Official sources attribute the dip in urea stock to higher demand, as against a 12.7 per cent drop in imports and a 10.2 per cent fall in production during April-June period of current fiscal from a year ago.
Due to a shift of choice by farmers towards paddy and maize, which consume more urea than oilseeds, tur and cotton, there has been a huge increase in demand for the nitrogen fertiliser. The paddy acreage has increased to 420.41 lakh hectare (lh) until August 22 in the current season from 390.80 lh a year ago, which is 7.6 per cent higher. Similarly, maize area too has increased 11.7 per cent to 93.34 lh from 83.58 lh.
But, pulses acreage is a tad higher at 112.77 lh from 111.42 lh, whereas oilseeds area is down by 2.8 per cent to 182.38 lh from 187.64 lh, and cotton dipped 2.6 per cent to 108.47 lh from 111.39 lh.
Published on August 28, 2025